Ukraine war ‘single biggest factor’ driving record diesel prices, Wright says
Energy Secretary chris Wright attributes the recent historic rise in diesel prices primarily to the Russia-Ukraine war, specifically citing the destruction of Russian refineries as a major factor. He explains that Russia, historically a notable exporter of diesel, has banned diesel exports, and China has also reduced its exports, tightening the refining market. Additionally, Wright mentions that Iran’s ongoing conflict contributes to rising gasoline and diesel costs.
He criticizes U.S. policies, noting that the Biden administration has closed over a dozen refineries, including two in California, whereas the previous Trump administration worked to expand refinery capacity. Wright is optimistic about Venezuela’s oil production increasing, citing recent agreements with U.S. companies like Chevron and positive developments in their oil exports, which he says are progressing well above expectations.
Despite international tensions and geopolitical issues, gas and diesel prices remain at record highs, with the national average gas price reaching $4.15 per gallon and diesel at $5.90. The typical seasonal drop in prices after Labor Day might potentially be offset by ongoing conflicts and geopolitical risks, particularly involving Iran. Wright suggests that with rising gasoline production and declining demand, prices are more likely to decrease than increase moving forward.
Energy Secretary Chris Wright said the Russia-Ukraine war is the “single biggest factor” behind the historic increase in diesel prices.
“Diesel has been impacted by a lot of factors, but the single biggest one there has been the Ukrainian destruction of Russian refineries,” Wright said on CNN’s State of the Union on Sunday morning.
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“Russia was a meaningful exporter of diesel throughout the last several decades,” he added. “Today, they’ve banned any exports of diesel. China has also dramatically throttled back exports of diesel, and in fact, Russia is importing gasoline, where they have historically been a net exporter of that. So the refining market has become very tight.”
His remarks came as President Donald Trump’s special envoys Steve Witkoff and Jared Kushner engaged in peace talks with Russian officials in Moscow. The pair also traveled to Kyiv to meet with Ukrainian President Volodymyr Zelensky.
The discussions resulted in no breakthroughs over the weekend as the war between Russia and Ukraine continues.
The Iran war is also contributing to the record rise in gasoline and diesel prices, but Wright didn’t focus on that conflict during his interview with CNN. Rather, he blamed Democrats for closing refineries over the past few years.
“The Biden administration closed over a dozen refineries in the United States,” Wright said. “Gavin Newsom in California closed two significant refineries just in the last 12 months. We, of course, are rowing in the opposite direction. The Trump administration is working with our refiners to expand their capacity.”
The Cabinet secretary cited his recent visit to Venezuela as part of the administration’s efforts to raise not only oil production but also refinery capacity to supply the global oil market.
Last week, the United States facilitated a series of deals between the Venezuelan government and five energy companies, including Chevron. The signed agreements are separate from the major U.S.-Venezuela oil deal announced by Trump days before the energy chief’s visit to Caracas.
“On Venezuela, I think things are going swimmingly, well above our projections,” Wright told CNN. “Their national production of oil is up 25%. Their exports of oil is up 50%. We’re way ahead of plan, and with billions of new dollars announced for investment into the country, every month that story gets better than it was the month before. So progress is happening rapidly.”
Amid all of the international developments, gas and diesel prices for the extended Labor Day weekend are at an all-time high.
As of Sunday, AAA says the national average gas price is $4.15, and the average for diesel is $5.90. Monday’s average gas price is on track to outpace the record set by Labor Day 2012, which was $3.82 per gallon.
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Gas prices usually decrease after Labor Day due to the falling seasonal demand this time of year, but it’s likely those costs will remain high due to geopolitical tensions, particularly the U.S.-Iran war over the Strait of Hormuz.
Asked if gas prices could rise significantly more than the already high levels, Wright said, “I don’t want to have an opinion on that.” Pressed again on the question, he answered, “Gasoline production is about to go up, and demand is about to go down. So, if I had to guess, they’re more likely to go down than go up.”
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